UK construction contributes £90 billion to the UK economy, 6.7% of the total. It provides employment for 2.93 million, representing 10% of total UK employment. Understanding the scale of the construction sector and its many different elements can be a challenge for the construction products marketer. In this blog I have gathered some information to help explain the UK construction sector, these take a look at the size of the UK construction industry, its different sectors and its impact on the UK economy.

Broadly speaking there are two main market sectors in construction: public sector, projects that are driven by central government and local government, and private sector, projects that are independently financed as well as public projects with private finance. KPMG report that the value of the UK government construction pipeline has grown by £62.2bn since 2015.

Within the public and private sectors there are many different types of project which fall into Health, Residential, Education, Retail, Leisure, Infrastructure etc. Latest figures from Barbour ABI show that the residential and infrastructure sectors combined represent 2/3rds of UK construction contracts.

This is similar to the latest ONS Construction output figures. In March 2016 they show 38% of all new work is attributed to all new housing, and 19% from infrastructure, with the remaining being attributed to other new work.

Education Construction Sector

Competitive Advantage recently completed a market report on the UK Education Construction Sector. The education construction sector is now starting to recover, with forecasted growth through to 2019. The government has pledged a significant investment of £12.7 billion for education construction projects to 2020 and beyond. In addition the university sector spends almost £32 billion each year on capital projects with a number of major projects announced for the next 10 years.

Healthcare Construction Sector

In the government autumn 2015 spending review £500 million was pledged for investment in building new hospitals, with new hospitals in Brighton, West Birmingham and Cambridge over the next 5 years promised. Recently KPMG have reported the value of construction pipeline for the Health sector to be £4.3 billion.

Of the 597 health projects there are 10 large NHS–led capital programmes, totaling £2.2 billion and 587 smaller works and capital programmes procured via the Procure 21 Framework. The ProCure21+ National Framework is a framework agreement with six Principal Supply Chain Partners. And Procure21 claim that 40% of the £110bn annual turnover of the Construction Industry comes from the public sector, and at present the NHS is the largest capital construction client in the country. Recently the next generation, ProCure22, was announced and is planned to start in October 2016.

Infrastructure Construction Sector

The National Infrastructure Pipeline 2016 provides further detail on the recent budget announcements regarding HS2, HS3 and Crossrail, together with details of investment in over 600 infrastructure projects and programmes in all sectors across the UK. The Pipeline gives an overview of what, when and where infrastructure will be built. £300 billion is to be invested in the coming five years. The accompanying National Infrastructure Delivery Plan 2016 to 2021, sets out the strategy for improved infrastructure delivery, and is the first to detail how infrastructure will support large-scale housing, regeneration and key social infrastructure.